A veritable thunderstorm of labor market data was released on Thursday. But the numbers didn't reveal quite as strong a labor market as analysts were predicting ahead of Friday's major release -- the May nonfarm payroll report by the Bureau of Labor Statistics. Though the economy added new jobs, the various reports showed it added fewer than had been expected.
ADP (ADP) said the private sector added 55,000 jobs in May, but it also upwardly revised its April job gain to 65,000 from the previously released 32,000. The Bloomberg News survey had expected the private sector to add 70,000 jobs in May.
Initial jobless claims fell 10,000 to 453,000, but the Bloomberg survey had expected a larger decline, to 450,000. What's more, the more-telling four-week moving average -- which smooths out anomalies in the data caused by holidays, weather-events, strikes and the like -- rose 1,750 to 459,000. Continuing claims also rose 31,000 to 4.66 million.
Investors and economists are watching for initial jobless claims to drop below 400,000 during the next two quarters, a development that would give them confidence that commercial activity is increasing fast enough to shift companies into hiring mode.
Online Index, Productivity Rise
There was some good news among Thursday's labor data: The Monster (MWW) Employment Index rose 1 point to 118 -- its fourth straight monthly gain. The year-over-year growth rate is now 14%. Also, Monster said all 28 metro areas it tracks showed increases in the number of jobs posted online.
Separately, U.S. worker productivity continued to increase at an impressive rate in the first quarter of 2010, although the pace slowed somewhat. Productivity rose at a 2.8% rate, a downward revision from the 3.6% first-quarter rate released earlier, the Labor Department said. Productivity rose at annualized rates of 6.3% and 6.2% in the fourth and third quarters of 2009, respectively. Productivity has now increased 4% in the past 12 months.
Further, unit labor costs fell 1.3% in the first quarter, less than the 1.6% first quarter decline released earlier. Unit labor costs have now fallen 4.2% over the past year. In 2009, they declined 1.9%, with 7.6% and 7.8% drops in the year's third and fourth quarters, respectively.
Improvements in Job Growth Aren't Inspiring Yet